Ama­zon’s gro­cery swoop could ‘trans­form’ sec­tor

Campaign UK - - NEWS - By Gemma Charles and Gur­jit De­gun

Ama­zon’s buy­out of Whole Foods Mar­ket could trans­form the gro­ceries in­dus­try, Marks & Spencer’s top mar­keter has said.

In an in­ter­view with Cam­paign at t he Cannes Lions In­ter­na­tional Fes­ti­val of Cre­ativ­ity last week, Pa­trick Bousquet-cha­vanne ex­plained that the move will help Ama­zon’s strat­egy for a “qual­ity sup­ply chain” be­hind Alexa, its voice-ac­ti­vated per­sonal as­sis­tant.

Ama­zon an­nounced a deal to buy Whole Foods for $13.7bn (£10.8bn) two weeks ago. The pre­mium supermarket chain will con­tinue to op­er­ate as a stand­alone brand led by chief ex­ec­u­tive John Mackey.

Bousquet-cha­vanne, ex­ec­u­tive di­rec­tor of cus­tomer, mar­ket­ing and M&, said: “It’s a very strate­gic move for them, trans­for­ma­tive po­ten­tially for the in­dus­try as a whole.

“Food on­line is not a new at­tempt for them – Ama­zon Fresh has been go­ing for some time. The chal­lenge is the eco­nomic model, the cost of the last mile.

“If you look at the net­work of Whole Foods, it’s less than 500 stores, so I don’t think they are tak­ing a large re­tail foot­print, which I think is very smart.”

He added that the move marks a “con­ver­gence of two op­po­site and yet com­ple­men­tary strate­gies” whereby tra­di­tional re­tail­ers are chang­ing their busi­ness mod­els to be­come fully om­nichan­nel and the tech gi­ants are try­ing to set up bricks-and-mor­tar re­tail op­er­a­tions.

Bousquet-cha­vanne ex­plained: “We have to look across all the prod­uct cat­e­gories while at the same time re­shape the phys­i­cal space to cater for the dig­i­tal world. Then you have the dig­i­tal pure-plays con­sid­er­ing a phys­i­cal re­tail play be­cause we all know phys­i­cal re­tail will al­ways be there.”

Marc Pritchard, chief brand of­fi­cer at Proc­ter & Gam­ble, also praised the move. He said: “The bril­liance of it is crit­i­cal in­te­gra­tion. In a way, what it means is ev­ery man­u­fac­turer has to step up their game.”

Whole Foods Mar­ket: boosts strat­egy for a ‘qual­ity sup­ply chain’ be­hind Alexa

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